Research: "The international transmission of Chinese monetary policy and the commodity channel"

Speaking of the international effects of national stimuli...

From VoxEU, March 3: 

Authors

Fabrizio Ferriani
Deputy Head of International Financial Markets and Commodity Division Bank Of Italy

Andrea Gazzani
Senior Economist Bank Of Italy

Chinese monetary policy significantly affects global economic activity and inflation through a real transmission channel that crucially propagates via commodity prices. This column shows that the intensive use of commodities in Chinese infrastructure investment explains the strong yet delayed response of industrial metals and energy prices. A sizeable portion of inflationary spillovers to foreign countries (about 70% for advanced economies) is directly transmitted via commodity prices due to dependence on commodity imports. Financing conditions in commodity-exporting emerging economies are also greatly affected by the commodity channel of Chinese monetary policy.

Despite the rise of China as a leading global economy (Baldwin 2025), Chinese monetary policy is still a relatively underexplored subject, especially from an international perspective. Several factors hinder the enhancement of our knowledge in this field, such as the availability of high-quality Chinese official data (Fernald et al. 2021, Barcelona et al. 2022, Chen et al. 2024) and, even more crucially, the peculiar institutional monetary policy framework where the quantity of money, rather than the interest rate, was the only intermediate monetary policy tool until 2017.

In a recent paper (Ferriani and Gazzani 2025), we examine how Chinese monetary policy propagates through the global economy, taking into account the specific institutional features of its monetary framework. We find that Chinese monetary policy is propagated at the international level through the commodity channel, in line with China’s prominent role as a commodity consumer (Figure 1).

Figure 1 Share of Chinese commodity consumption over global consumption

Sources: Author’s elaboration on data from Statistical Review of Energy, World Bank, IMF, LSEG.

The macroeconomic impacts of Chinese monetary policy
We leverage vector autoregressive (VAR) models and the monetary policy shocks introduced by Chen et al. (2018, 2023) to investigate the macroeconomic impacts of Chinese monetary policy both domestically and internationally. The exogenous component of monetary policy is identified through deviations from a nonlinear Taylor rule in which the Chinese central bank determines money growth as a function of the annual GDP growth targets set by the government. The central bank responds more to a negative output gap with respect to the target than to a positive gap.

Domestically, Chinese monetary policy depresses both output and inflation and intensely affects commodity-intensive infrastructure investment....

....MUCH MORE

As Germany Positions To Be The World's Liquidity Pump....

"The world's" may be a bit of hyperbole but combined with what China will have to do to achieve the 5% growth figure that was reaffirmed yesterday, we are looking at potentially maybe $2 trillion in deficit spending over the next six years between the two economies and though not enough to offset the shrinkage of the U.S. deficit—which shrinkage must happen to delay slow-motion but inevitable worldwide disaster—it looks like the global party could continue until sunrise and/or 2030.

The fact much of the German deficit spending will go toward armaments is all the better—it is the most inflationary bang-for-the-buck, so to speak, spending a government can do; you make stuff, you blow it up, you make more stuff. It may not add to a country's real national wealth but boy-oh-boy does it boost nominal GDP growth.

This is a really big deal. If you don't believe me, believe the German bond market.

From ZeroHedge, March 5:

Bond Vigilantes Blow Up German Bond Market After "Whatever It Takes" Fiscal Package 

As we detailed earlier, last night saw Germany announce plans for one of its largest fiscal regime shifts in post-war history. 

The leaders of CDU/CSU and SPD this evening announced an agreement on an even more significant fiscal expansion than what anyone had expected at the beginning of the week. The plan is to make three material changes to the debt brake in the very near term, convening the outgoing parliament in which the centrist parties still hold a constitutional majority:

• A EUR 500bn (11.6% of GDP in 2024) special purpose off-budget vehicle for infrastructure investment, that is planned to be disbursed over the next 10 years, and which amounts to roughly 1% of GDP in annual infrastructure spending (of which EUR 100bn will be allocated to the federal states).

• A reform of the debt brake to exempt any defense spending in the main budget’s "Einzelplan 14", the budget of the Ministry of Defence, over and above 1% of GDP, effectively permitting open-ended borrowing for defense. Currently the Einzelplan 14 amounts to EUR 53.25bn (1.25% of nominal GDP in 2024). The current off-budget fund adds another EUR 25bn of defence funding but this would not be relevant for this part of the proposal. Thus apart from removing any constitutional limit on additional defence spending, 0.25% of GDP (EUR 11bn) of spending in Einzelplan 14 that surpasses the 1% threshold is freed up to fund other measures, for example tax reductions.

• An increase in the structural deficit allowed for the states (Länder) from the current level of 0.0% of GDP to 0.35%, the same proportion as the federal level. Furthermore the proposal includes the formation of an expert commission tasked with creating a long-term reform proposal to structurally reform the debt brake by the end of 2025. This would have to be passed by the newly elected 21st Bundestag. It remains unclear if this reform proposal would supersede the announced measures to be passed in the 20th Bundestag or would add to them.

All elements require a two-thirds constitutional supermajority. The parties want to pass the agreed measures with the old 20th Bundestag parliament, before the newly elected 21st Bundestag (where the AfD has a potential blocking minority) is convened on March 25.

In keeping with recycled European aphorisms, party leaders, especially the Conservatives, explicitly referred to this decision as a "whatever it takes" moment and a determination to "rearm completely". According to DB's reading, tonight's robust rhetoric implies that the open-ended borrowing room for defense will be used at a pace that could bring German defence spending to at least 3% perhaps as early as next year (although the exact target may only be defined after the NATO summit in June).

Assuming it goes through, Deutsche Bank's Jim Reid warns that everything you thought you knew about Germany's economic prospects 3 months ago, or even 3 weeks ago, should be ripped up and you should start your analysis from fresh. 

Today’s CoTD simply looks at Germany’s fiscal deficit through time and assumes an extra 3% deficit phased in over the next decade from current levels. 

This is incredibly back of the envelope, but puts the planned move in some historical perspective. 

Of course, if growth rebounds then this may reduce the deficit so there are a lot of moving parts. However, this could easily be a sustained fiscal stimulus unparalleled in Germany’s history. Germany will still likely have the lowest debt/GDP in the G7 as far as the eye can see. 

We estimated that Germany could spend around $1.6tn before its debt/GDP equalled the second lowest (the US) in the G7. 

This package has the potential to be in the magnitude of around $1tn over time and the US won’t stand still in terms of its debt over this period. 

If you want a bit of fun, Germany could spend $8.5tn before its debt/GDP equalled Japan’s! 

So don’t underestimate how important this news is. Your portfolio over time will thank you for it.

Indeed it will, if you were long bunds as zee bond vigilantes just sent Bund yields higher by over 24bps...

...the biggest yield jump in history for the German bond market...

....MUCH MORE

Also at ZH this morning:

Futures Rise On Hope For Trade War Relief, Europe Soars, Bunds Crash On "Whatever It Takes" Stimulus

In equities, Germany's DAX index is up 3 1/2% today.

"Robert Rubin Blames Trump for Most Uncertainty in 60-Year Career"

Huh.*

From Bloomberg via MSN, March 4:

Former Treasury Secretary Robert Rubin said President Donald Trump’s economic policies have stoked the “greatest uncertainty” in his six-decade career, warning that they will undermine confidence, worsen the US fiscal trajectory and endanger US credibility on the global stage.

“A lot of what is going on is adversely affecting confidence — it is now, and I think even more so in the future,” Rubin said in an interview from the Bloomberg Invest conference in New York Tuesday, referring to confidence in the rule-of-law. He said the Trump administration appears to be targeting its opponents in its application of law, and is outright violating commitments made in treaties with trading partners.

Rubin singled out the efforts by Elon Musk’s DOGE to shrink federal spending as “doing tremendous damage to government and to the recipients of government services.” Rather than creating efficiencies, “what DOGE is going to do is tear apart our government.”

Rubin, who oversaw a shift to budget surpluses as Treasury chief under Democrat Bill Clinton in the 1990s after serving as co-chairman of Goldman Sachs Group Inc., said that while some federal spending can be cut, “as a practical matter” there’s insufficient scope for that to rein in deficits. 

More broadly, Rubin hammered Trump’s tariff hikes for wrecking the foundation of the postwar global economic framework, which was based on reducing trade barriers in order to boost productivity and people’s livelihoods.

Postwar Framework
“We have spent all these years since World War II developing alliances and allies, supported by all sorts of commitments,” he said. This was “all in our economic self-interest and our geopolitical self-interest — and I think we’re putting all that at risk.”

Trump as of Tuesday has added 25% tariffs on all Mexican and most Canadian goods, and a 20% surtax on Chinese goods, with further levies planned in the coming weeks.

The increases in levies amount to violations of treaty obligations, “which can affect our credibility around the world,” Rubin said. “They create a very serious risk of inflation,” he also said.

“If the new normal is a world of tariff walls, then we’ll all just be less productive, less efficient,” he said. “And our people will, as a result, do less well than they would otherwise have done.” 

Rubin, 86, said that he’s now seeing the “greatest uncertainty” in his about-60 years of being involved in “decision making of one sort or another with respect to markets and economies.”....

....MUCH MORE

*Mr. Rubin was one of the three men, along with Summers and Greenspan, that created the Great Financial Crisis of 2007 - 2009. Here they are on the cover of TIME magazine, February 15, 1999:

In 2008 the Fed had to bail out Mr. Rubin's employer, Citigroup, to the tune of billions of dollars.

‘PONZI SCHEME’ AT CITI
—New York Post, Dec. 4, 2008

If Interested here's a nice introduction to what the three amigos did in: 

"The Economists' Hour, A Powerful New Economic History"

The Essential Larry Summers: How He and Alan Greenspan Laid the Groundwork for the Financial Crisis and Larry Lost $1.8 Billion for Harvard

Today In Irony: Robert Rubin Reviews A History Of the Fed (yes the same fed that rescued citi)

And our application of an older econ paper to understanding the meta-narrative of why Rubin's co-conspirator at Citi, Chuck Prince, was able to say with a straight face:

“When the music stops, in terms of liquidity, things will be complicated. But as
long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
—Citigroup CEO Chuck Prince, July 9, 2007

Several months later the liquidity "music" ends, Bear Stearns fails, Lehman bankruptcy follows and the entire financial system nearly collapses. Bringing to mind (November 2, 2019):

Speaking of Robert Rubin: "The Optimal Design of Ponzi Schemes in Finite Economies"
This is a paper from 2002 that accurately predicted the events of the Great Financial Crisis, 2007 - 2009.
TL;dr: You don't play in the late stages of a pyramid or Ponzi scheme unless you know there will be a bailout.
From the Social Science Research Network:

Journal of Financial Intermediation, January 2003

Posted: 1 Oct 2002

Utpal Bhattacharya Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management

There are 2 versions of this paper

Abstract As no rational agent would be willing to take part in the last round in a finite economy, it is difficult to design Ponzi schemes that are certain to explode. This paper argues that if agents correctly believe in the possibility of a partial bailout when a gigantic Ponzi scheme collapses, and they recognize that a bailout is tantamount to a redistribution of wealth from non-participants to participants, it may be rational for agents to participate, even if they know that it is the last round. We model a political economy where an unscrupulous profit-maximizing promoter can design gigantic Ponzi schemes to cynically exploit this "too big to fail" doctrine. We point to the fact that some of the spectacular Ponzi schemes in history occurred at times where and when such political economies existed - France (1719), Britain (1720), Russia (1994) and Albania (1997).

Keywords: Ponzi schemes, bubbles, bailouts, moral hazard

This version is not available for download but the 1998 version is:
SSRN download page (33 page PDF)

Previously on Robert Rubin and his role in the financial disaster, the bank bailouts and the $126 million he pocketed from Citi when big C got bailed:
"The Economists' Hour, A Powerful New Economic History"

Solar: Sunnova Issues 'Going Concern' Warning (NOVA)

From Sherwood News, March 3:

Sunnova warns it may not survive as solar industry flails
Sunnova missed earnings and gave a “going concern” warning. Its peers haven’t done much better.  

Residential solar company Sunnova’s stock price plummeted 64% Monday after the company warned investors that it’s unsure whether it will be able to stay in business. 

Sunnova Energy also posted quarterly results that missed Wall Street estimates, racking up a loss per share of $1.14, which is an improvement from the same period last year but steeper than the $0.66 analysts polled by FactSet were expecting. It also reported $224 million in sales, $10 million under what the Street was expecting.

But perhaps most worrying to investors, Sunnova said it doesn’t have enough cash coming in to meet its obligations and is suspending guidance. “Substantial doubt exists regarding our ability to continue as a going concern for a period of at least one year from the date we issue our consolidated financial statements,” the company said in its quarterly filing.

“Going concern” is an accounting term that signals the company has reason to believe it may not be able to cover its costs within the next year.

Sunnova has been squeezed by high interest rates and lower state incentives for residential solar, which has weakened demand. President Trump also poses a headwind for the industry: he is hostile to the federal tax credits for renewable energy and has imposed tariffs on China, a major solar panel producer.

Sunnova recently announced that it would lay off 15% of its staff, which it said would save it $70 million in 2025. It also said on Monday that it took out a $185 million loan at 15% interest....

....MUCH MORE 

I couldn't recall having ever posted on this one, having zero interest in these sorts of "businesses" but a quick search of the blog turns up one hit in July 2024's "Solar: "SunPower’s Meltdown Could Have Wide Impact" (SPWR)".

Satellite-Inferred Global Temperature Anomaly Reversed Downtrend in February

Last month's temperature was within 1/100 of a degree C of our prop bet target and an unfamiliar flash of brilliance, easily suppressed, came to mind:

0.01°C away from the target.

If I was smart I'd just declare victory today, a full 15 months ahead of schedule and let the bet melt into the noise of the internet but as they say at the better science schools: Homie don't roll that way.

And now the decline has turned higher.

From Dr. Roy Spencer at the University of Alabama-Huntsville (along with Santa Clara CA's Remote Sensing Systems, one of the two keepers of the satellite record), March 3:

UAH v6.1 Global Temperature Update for February, 2025: +0.50 deg. C

The Version 6.1 global average lower tropospheric temperature (LT) anomaly for February, 2025 was +0.50 deg. C departure from the 1991-2020 mean, up a little from the January, 2025 anomaly of +0.45 deg. C.

The Version 6.1 global area-averaged linear temperature trend (January 1979 through February 2025) remains at +0.15 deg/ C/decade (+0.22 C/decade over land, +0.13 C/decade over oceans)....

....MUCH MORE

Our proposition bet has the UAH figure falling from +0.95°C the day we announced the bet, May 2, 2024 (three days later the April figure was announced, +1.05°C, not very good timing on the part of yours truly) to +0.45°C by the termination date:

Here's a prop bet for you. By May 15, 2026 we will see the satellite-measured -inferred global lower atmospheric temperature anomaly decline by at least 1/2 degree C.

The two keepers of the satellite record are Remote Sensing Systems in Santa Rosa CA and the University of Alabama-Huntsville.

Here's the temperature graph from UAH:....

If interested here is the series of monthly posts tracking the bet.

"EU imports of Russian fossil fuels in third year of invasion surpass financial aid sent to Ukraine"

So, in effect, financing both sides of the war.

That is someone's dream come true.

From the Centre for Research on Energy and Clean Air (CREA), February 2025:

Tighter sanctions that undercut Russian countermeasures can slash Kremlin revenues by 20% annually

Despite a range of sanctions and the threat posed by dependence on Russian energy, in the third year of Russia’s full-scale invasion of Ukraine, EU imports of Russian fossil fuels in particular remain largely unchanged, totalling EUR 21.9 bn, a 6% year-on-year drop in value but merely a 1% year-on-year drop in volumes.

Notably, EU imports of Russian fossil fuels in the third year of the invasion surpassed the EUR 18.7 bn of financial aid they sent to Ukraine in 2024.

Russia’s total global fossil fuel earnings in the third year of the invasion also reached EUR 242 bn and have totalled EUR 847 bn since the start of the invasion of Ukraine in February 2022....

....Highlighted by

• Newsweek, Russia Making Billions From Fossil Fuels Despite Sanctions
• Safety4Sea, New report looks at EU imports of Russian fuels and shadow fleet
• The Guardian, EU spends more on Russian oil and gas than financial aid to Ukraine – report
• The New Voice of Ukraine, EU pours more cash into Russian oil than Ukraine’s aid
• The New Statesman, What can Starmer get out of Trump on Russia?

....MUCH MORE 

Related:

Let's You and Him Fight - TV Tropes

A trope where two people fight because someone manipulated them into the struggle. See examples from comics, movies, video games, and more....

Capital Markets: "Dollar Mostly Softer as Tariffs Implemented"

From Marc Chandler at Bannockburn Global Forex:

Overview:  The postponed US tariffs on Canada and Mexico have gone forward and China faces its second 10% tariff increase in two months. The dollar is mixed. The Swiss franc and Japanese yen are the strongest of the G10 currencies, up around 0.45%-0.60% in late European morning turnover, but the Canadian dollar is no slouch and is up about 0.35%. Canada (and China) have announced what are seen as mild initial retaliatory measures, while Mexico is expected to make an announcement later day. The euro tested its recent highs near $1.0530. Japan's Prime Minister Ishiba denied US claims that it was seeking trade advantage in the currency market. Most emerging market currencies are firmer, including the Chinese yuan. The Mexican peso led the emerging market currencies lower yesterday and is the weakest today, off about 0.8%.

Stocks do not apparently like the tariffs. Nearly all the markets in the Asia Pacific region fell. Europe's Stoxx 600 is off more than 1%, which if sustained would be the largest drop so far this year. US index futures are trading softer. A poor reception to the 10-year bond auction in Japan saw the 10-year JGB yield edge up to almost 1.41%. European benchmark 10-year yields are off mostly 2-3 bp, with the 10-year Gilt yield off five basis points to 4.50%. The 10-year US Treasury yields is up one basis point to almost 4.17%. Gold's recovery is extending. It fell 2.65% last week, the first weekly loss of the year. It was up 1.2% yesterday and is up about 0.75% today near $2915. OPEC+ confirmed that the scheduled increase in output will begin next month. April WTI, which traded above $70 yesterday is below $68 now to new three-month lows.

USD: Yesterday's losses saw the Dollar Index surrender more than half of the gains scored in the second half of last week....

....MUCH MORE

"Tesla's China-made EV sales fall 49.2% in February" (TSLA)

In early pre-market trade the stock is down $4.75 (-1.67%) to $279.90. The big election day up-gap extends from the ~$251 close on November 5 to the ~$284 open on November 6.

Lifted in toto from Reuters via MSN, March 4:

U.S. automaker Tesla sold 30,688 China-made electric vehicles in February, down 49.2% from a year earlier, data from the China Passenger Car Association (CPCA) showed on Tuesday.

Deliveries of China-made Model 3 and Model Y vehicles fell 51.5% from the previous month.

Chinese rival BYD, with its Dynasty and Ocean series of EVs and plug-in hybrids, recorded a 161.4% increase in passenger vehicle sales to 318,233 units last month.

A February 27, 2025 post:

Tesla's Stock Is Nearing A Bottom (TSLA)

Whether or not it holds will depend on the broader market but for now the next stop for the elevator is within sight.

A partial repost (the outro) from February 11's Follow-Up: "China's BYD links up with DeepSeek in an AI threat to Tesla":

*****

....Tesla was down $22.23 (-6.34%) during the regular session and is down another $1.30 (-0.40%) in late after-hours trade. $327.20.

As to a potential bottom? Long time readers know where the gaps are:

FinViz

The stock is at $287.54 down $3.26 (-1.12%) after getting as low as $280.91 fifteen minutes ago.

The November 5 - 6 gap extends from $251.44 to the election day open at $284.67.

"Major sudden stratospheric warming forecast, final polar vortex collapse of the season signals mid-March freeze"

Readers who have been with us for a while know all about this stuff but because I like simple graphics there will be a repost as the outro.

From The Watchers, March 2:

The final polar vortex collapse of the 2024-25 winter season is forecast to occur in mid-March as a strong stratospheric warming event develops, potentially leading to significant weather disruptions across the Northern Hemisphere.

3D rendition of polar vortex split - March 13, 2025. Image credit: stratobserve

An analysis by Andrej Flis of Severe Weather Europe (SWE) indicates that the second polar vortex collapse of 2025 is expected to occur in mid-March. This follows the previous collapse in mid-February, which brought record-breaking cold temperatures across the United States.

This event is expected to be much stronger than the previous one and will mark the final collapse of the season. The next polar vortex in the stratosphere will not form until the 2025-26 winter season....

....MUCH MORE including graphs, video and further discussion.

And from a December 2019 post, a remarkably similar effect:

So You Want to Be a Natural Gas Trader?

...As we've been saying for a couple months, Jet Stream!

"The market is trading off the cold snap and the cold snap is not going to last" because we are currently experiencing a meridional (north - south) jet stream that progresses in stately fashion from California to New York, alternating cold and warm:

The meridional pattern can set up a nice long-then-short-then long sequence in natural gas futures trading.
Except when it dips too far and you have Texas guzzling gas like Minnesota. Or if the pattern stalls and the warmth is delayed.
Or if it changes to a zonal pattern.

The zonal jet stream pattern keeps the cold air on the north side of the big wind (British Airways 747 Reached Speeds of 825 mph Riding Jet Stream New York to London) allowing the cold to intensify whereas  the meridional pattern allows the cold air to slide down to more populated areas of North America and Europe which gives rise to the misuse of the term polar vortex and makes natural gas traders (if they are nimble) some money.

The thing to be aware of with the meridional flow is the whole pattern moves west to east, meaning the places that get the frigid blast then feel the warm air that follows the cold dips.

"Taiwan Semiconductor to Invest $100 Billion in U.S. Chip Plants" (TSM)

Serious money, the stock is down 2.3% at $176.35.

From Barron's, March 3:

Taiwan Semiconductor Manufacturing plans to invest $100 billion to build out chip-making facilities in the U.S., according to people familiar with the matter.

The company intends to make the investment over the next four years as part of a federal effort that could be announced as soon as later today, The Wall Street Journal first reported.

TSMC didn’t immediately respond to a request for comment from Barron’s.

The chip maker has been the subject of rumors as of late. TSMC is also reportedly thinking of taking a stake in Intel’s struggling foundry business or buying the division outright....

....MORE 

I will never be able to think of OpenAI's Sam Altman without thinking of how the TSMC brass mocked him last fall:

Chips: "TSMC execs allegedly dismissed Sam Altman as ‘podcasting bro’ — OpenAI CEO made absurd requests for 36 fabs for $7 trillion"

The thing I continually remind myself is that TSMC (and ASML in the Netherlands) actually make stuff.

Some of the highest-high-tech that humans have ever accomplished. 

And then this podcasting bro comes up and says he's going to need 36 fabs. Alrighty then.

"This Essential Element of the Power Grid Is in Critically Short Supply"

Elon Musk has been prophesying this for the last couple years. And here we are.

From IEEE Spectrum December 11, 2024:

A transformer supply crisis bottlenecks energy projects  

To Nick de Vries, chief technology officer at the solar-energy developer Silicon Ranch, a transformer is like an interstate on-ramp: It boosts the voltage of the electricity that his solar plants generate to match the voltage of grid transmission lines. “They’re your ticket to ride,” says de Vries. “If you don’t have your high-voltage transformer, you don’t have a project.”

Recently, this ticket has grown much harder to come by. The demand for transformers has spiked worldwide, and so the wait time to get a new transformer has doubled from 50 weeks in 2021 to nearly two years now, according to a report from Wood MacKenzie, an energy-analytics firm. The wait for the more specialized large power transformers (LPTs), which step up voltage from power stations to transmission lines, is up to four years. Costs have also climbed by 60 to 80 percent since 2020.

About five years ago, de Vries grew worried that transformer shortages would postpone his solar projects from coming online, so he began ordering transformers years before they’d actually be needed. Silicon Ranch, based in Nashville, now has a pipeline of custom transformers to make sure supply chain problems don’t stall its solar projects.

The company isn’t alone in its quandary. A quarter of the world’s renewable-energy projects may be delayed while awaiting transformers to connect them to local grids, according to the Wood MacKenzie report. In India, the wait for 220-kilovolt transformers has leaped from 8 to 14 months, potentially holding up nearly 150 gigawatts of new solar development.

And it’s not just renewable-energy projects. The transformer shortage touches utilities, homeowners, businesses, rail systems, EV charging stations—anyone needing a grid connection. In Clallam County, the part of Washington state where the Twilightmovies are set, officials in May 2022 began to deny new home-construction requests because they couldn’t get enough pad-mounted transformers to step down voltage to homes. To address the backlog of customers who had already paid for new electrical service, the utility scrounged up refurbished transformers, or “ranch runners,” which helped but likely won’t last as long as new ones.

The ripple effects of the shortage touch both public policy and safety. When a transformer fails from wear and tear, gets hit by a storm, or is damaged by war or sabotage, the inability to quickly replace it increases the risk of a power outage. The European Green Deal, which plans for an enormous build-out of Europe’s transmission network by 2030 to accelerate electrification, is imperiled by the protracted wait times for transformers, says Joannes Laveyne, an electrical engineer and energy-systems expert at Ghent University, in Belgium.

For power engineers, this crisis is also an opportunity. They’re now reworking transformer designs to use different or less sought-after materials, to last longer, to include power electronics that allow the easy conversion between AC and DC, and to be more standardized and less customized than the transformers of today. Their innovations could make this critical piece of infrastructure not only more resistant to supply chain weaknesses, but also better suited to the power grids of the future....

....MUCH MORE

Previously, in general:

How AI Is Sparking a Change in Power Generation

"There’s a Shortage of Electrical Wires, Transformers. That’s Good for These Stocks."

"Electrical transformers could be a giant bottleneck waiting for the AI industry—unless AI itself solves the problem first"

 And on Elon

Elon Musk's Latest Mission: Rev Up the Electricity Industry

One Year On Fom His Prediction: "Elon Musk Wants More Power"

"Elon Musk: AI will run out of electricity and transformers in 2025"

There are more previous posts but astute reader gets the point: We watch transformers so you don't have to.

Capital Markets: "Asia and Europe Seem Less Keen about the Dollar than North America"

From Marc to Market:

Overview: The dollar rallied in the second half of last week even as interest rates fell amid a new growth scare. The 25% tariffs on Canada (10% on energy) and Mexico that were postponed a month ago, could be implemented as early as tomorrow.  The only tariffs that have been imposed so far were 10% on Chinese imports, and another 10% threatened tomorrow, and apparently in April, too.  The economic disruption that the tariffs and tariff threats seem to be creating has become a more central concern.  The dollar is softer against all the G10 currencies.  European currencies are leading the move, amid higher rates and stronger stocks.  Emerging market currencies are mostly firmer, led by central European currencies.  

Asia Pacific equities were mixed today.  Japan, Hong Kong, and Australia rallied among the large markets.  China, Taiwan, and India were lower, while South Korea's was on holiday.  Europe's Stoxx 600 has rallied for the past ten weeks. It is up 10.25% year-to-date and is up about 0.5% today. US index futures are building on the strong pre-weekend recovery. Benchmark bond yield is jumping 4-7 bp in Europe and the 10-year US Treasury yield is up almost five basis points to 4.25%.  Gold fell almost 2.7% last week, its first weekly decline this year. It is about 0.5% higher today near $2872.  April WTI set a three-day high earlier near $70.60 but has reversed low to approach last Friday's low around $69.15.  

USD:  The Dollar Index is snapping a three-day 1.5% advance. The renewed focus on tariffs, which could be implemented this week on Canada and Mexico and another 10% hike on the levy on Chinese goods helped fuel the greenback's recovery in the face of falling yields in the second half of last week....

....MUCH MORE

"Mercedes-Benz and Nvidia are testing autonomous vehicles in San Francisco" (NVDA; MBG.de)

 From the San Francisco Business Times, February 28:

A Mercedes-Benz autonomous test vehicle spotted Friday in San Francisco's Marina district appears to be a partnership between the German car maker and Nvidia (NASDAQ: NVDA).

The vehicle, an all-electric EQS 580 with sensors similar to those found on Waymo cars, had a sticker on the driver's side door saying "Nvidia Corporation | Mercedes-Benz test vehicle."

Neither company responded to a request for comment asking for more details about the project.

While Nvidia and Mercedes-Benz have previously announced a partnership to use Nvidia's chips and AI software in its vehicles, they have not made any formal announcement related to testing fully autonomous vehicles on U.S. roads.

Nvidia currently has a permit with California's DMV to test autonomous vehicles with a safety driver, while Mercedes-Benz holds a more advanced permit with the DMV, allowing it to deploy AVs without a human driver in certain areas...

....MORE

Related at Yahoo Finance, also February 28:

Nvidia's auto business doubled last quarter. Here's why CEO Jensen Huang believes it's just the beginning.

Nvidia’s foray into the automotive sector is nothing new, but the drumbeat of news coming from the business has picked up recently.

Take CES last month, for example, where the company highlighted the business.

"In order to build a self-driving car, you need to train a mountain of data, video data," Nvidia CEO Jensen Huang said in an interview with Yahoo Finance from CES, explaining that Nvidia's graphics chips can be used not just for video games, but for simulations to train autonomous vehicles.

"If just right now where the self-driving car business is, if it's already a $5 billion business for us, imagine how big it's going to be when we have a hundred million new cars per year. A trillion miles driven per year. This is likely going to be one of the largest robotics industries in the world and one of the largest computing industries in the world," Huang said.

The company made a slew of news this quarter and at CES on the automotive front.

Nvidia announced that Toyota (TM) — the world’s largest automaker — will begin using the company’s DRIVE AGX Orin chip and the Nvidia DriveOS operating system to power advanced driver assistance features in its next-generation vehicles.

Nvidia said German tire and auto supplier Continental and self-driving truck company Aurora (AUR) would also use Nvidia’s DRIVE hardware and DriveOS software in Aurora’s level 4 autonomous driving system, Aurora Driver. Continental and Aurora plan to bring autonomous trucks hauling freight to roads beginning in 2027.

And Korea’s Hyundai Motor Group announced it would use Nvidia technologies to accelerate AV and robotics development, as well as smart factory initiatives....

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Look at that, all grown up now. Our introduction to a June 2023 post:

"Elon Musk Predicts Nvidia’s Monopoly in A.I. Chips Won’t Last" (NVDA; TSLA)

Before we get to the headline story, some background. Tesla and Nvidia have a history.

In 2015 - 2016 when everyone thought that autonomous driving was just around the corner, the challenge was seen as both a sensor issue, for example: LIDAR vs cameras, and a machine learning/artificial intelligence problem which boils down to training the AI 'puters with as much data as you can so that out in the real world the autonomous vehicle can say to itself: "Yeah, I've seen this situation before, here's the response that worked best. Both the training and the on-the-road-recall, if they are to be anywhere near efficient, require the fastest chips you can find. Tesla had a whole bunch of data from a few billion miles of actual driving for computers to train on, and, combined with Nvidia's fastest-in-the-world GPU chips, it was a match made in heaven.

Except it wasn't.

The challenge of autonomous driving on open roads alongside non-autonomous vehicles was bigger than anyone in that simple, optimistic time ever envisioned, even in their nightmares. Here's one example about Waymo from a 2017 post:

"When Google was training its self-driving car on the streets of Mountain View, California, the car rounded a corner and  encountered a woman in a wheelchair, waving a broom, chasing a duck. The car hadn’t encountered this before so it stopped and waited."

—Markets and Waterfowl: Machine Learning Is Only As Good As the Training It Receives

In May 2015 we were posting " Nvidia Wants to Be the Brains Of Your Autonomous Car (NVDA)" and seven months later the more declarative "Class Act: Nvidia Will Be The Brains Of Your Autonomous Car (NVDA)"

Then in October 2016, what was probably the high-water mark for the relationship "Nvidia Could Make $1B From Tesla's Self-Driving Decree: Analyst (TSLA, NVDA)"

Sadly, the task was just too difficult but Mr. Musk thought it was doable if only he could get even faster chips than Nvidia had on offer:

NVIDIA Partner Tesla Reportedly Developing Chip With AMD (TSLA; NVDA; AMD) 
Today in leveraged WTFs....

"During a talk at a private party, Elon Musk said Tesla is developing specialized AI hardware "'That we think will be the best in the world;" (TSLA)  

"Tesla says it’s dumping Nvidia chips for a homebrew alternative" (TSLA)
The only reason for Tesla to do this is that NVIDIA's chips are general purpose whereas specialized chips are making inroads in stuff like crypto mining (ASICs), Google's Tensor Processing Units (TPUs) for machine learning and Facebook's hardware efforts. 

 

 Watch Out NVIDIA: "Google Details Tensor Chip Powers" (GOOG; NVDA)
We've said NVIDIA probably has a couple year head start but this bears watching, so to speak....

Culminating in August 2018's
"Nvidia CEO is 'more than happy to help' if Tesla's A.I. chip doesn't pan out" (NVDA; TSLA)

And now on to the headliner, from Observer, June 8....

Leverage and Timing: "Trader makes $7 million in one day going 50x long bitcoin, ether ahead of Trump's crypto reserve announcement"

From The Block, March 2:

• A trader who used $6 million to open a 50x leveraged long position on both BTC and ETH made $7 million in 24 hours after Trump’s crypto reserve announcement caused crypto prices to pump.
• Notably, the trader closed their position before Trump’s announcement clarifying BTC and ETH would be included in the reserve, missing out on even more gains. 
• At one point early Sunday morning, the price of ETH had to fall just $54 more to liquidate the trader’s long position. 

A trader on decentralized perpetual swaps platform Hyperliquid has profited $7 million in just 24 hours after opening a leveraged long position ahead of Trump's crypto reserve announcement Sunday morning. 

The trader deposited about $5.6 million USDC to Hyperliquid, blockchain data show, using the funds to create large 50x leverage long positions on bitcoin and ether. The use of leverage brought his total position to a total value of over $200 million, drawing the attention of blockchain analysts. 

Early Sunday morning, the price of  ETH (+9.85%) had fallen so that the trader's long position was in danger of liquidation — around 9:37 am, if ETH had fallen just $54 dollars more, the trader's long position would have been liquidated, resulting in a loss of over $2 million....  

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"China May Target US Crops in Tariff Response, Global Times Says:

Global Times is the outward-facing propaganda organ of the government/party.

From Bloomberg, March 2: 

China is considering retaliatory measures on US agriculture and food products in response to tariffs from the Trump administration that are scheduled to take effect on Tuesday, according to the Global Times.

Beijing’s response will likely include tariffs and non-tariff measures, Communist Party-backed Global Times reported, citing a person they didn’t identify. China’s soymeal prices surged 1.5% on concerns that escalating trade tensions could disrupt US shipments of soybeans and tighten the market further.

President Donald Trump has pledged to double the levy on China to 20%, while also hitting Canada and Mexico with tariffs on March 4. The Asian nation is the world’s biggest importer of soybeans, which is typically crushed into cooking oil and animal feed, particularly the country’s large pig herd....

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If they do target agricultural products they had better hope for good weather in Brazil.

"How NATO Helped Seal Ukraine’s Defeat Against Russia"

When Mao called the U.S. a paper tiger he was incorrect but now, sixty-nine years later it is the term that comes to mind when thinking about NATO.

From 19fortyfive, February 25: 

The NATO Dilemma for Ukraine: On February 25, 2022, one day after Russian troops invaded Ukraine, President Biden declared that “Putin’s aggression against Ukraine will end up costing Russia dearly — economically and strategically.  We will make sure of that.” When the war is over and its history written, Biden concluded, “Putin’s choice to make a totally unjustifiable war on Ukraine will have left Russia weaker and the rest of the world stronger.”

Three years later, with Biden off the world stage following his defeat in last year’s presidential election, Putin and Russia are poised to win the war against Ukraine, despite the massive support given by the U.S. and NATO, and will end in a much stronger position.  

How could this be? After the United States and Europe gave such extraordinary amounts of money and machines to Ukraine, after 40 nations assembled to support Ukraine against Russia, how could Ukraine have failed to win and how could Russia gotten stronger? Though there are a number of practical reasons, the core reason for this failure is as embarrassing as it is alarming: NATO bases its policies on a narrative while Russia based its policies on ground truth realities.

Lesson number 1 that NATO and the U.S. needs to learn is that wars don’t give a damn about your morality or values. In the minds of most European leaders and establishment figures in the United States, Ukraine was and remains in the moral right; in their rendering, Russia is evil and abhorrent. Russia, therefore, must lose and Ukraine must win, based solely on the mental construct that Russia = evil and Ukraine = good. Yet while European and American establishment figures and mainstream media live in that space, bombs, bullets, and bayonets could care less.

The weapons of war, the balance of power between opposing parties, and the ammunition are apolitical and amoral. They have no regard for anyone’s nationality, absence of concern about who owns what territory, or what any party to a conflict believes “ought” to be. When a bomb or missile or rocket detonates on target, it will explode and everything in the blast radius will be killed or destroyed. The side with the most air power, air defense, drones, rocket forces, ammunition, industrial capacity, and above all the most trained soldiers, will most often win a war between two sides. 

When comparing the two main protagonists in this war in late 2021 and early 2022, any rational military analyst would have immediately concluded that the balance of power was overwhelmingly in Russia’s favor. Preferences and emotions aside, the physical realities of the two sides should have led the United States and NATO to have recognized it was a losing prospect to set as an objective the defeat of the Russian Federation. 

Such a recognition should have led the alliance to council accommodation by Ukraine in the fall of 2021, taking NATO membership off the table, and instead pursuing economic integration with the EU and perhaps bilateral agreements with various European states to help Ukraine modernize its armed forces so it could defend itself.  Absent NATO membership, an unemotional NATO analysis would have revealed that Russia would likely never have invaded absent a promise of eventual NATO membership....

....MUCH MORE

This is similar to what Professor Mearsheimer was saying as far back as 2015: 

 “The West is leading Ukraine down the primrose path & the end result is Ukraine is going to get wrecked.” 

—John J. Mearsheimer, R. Wendell Harrison Distinguished Service Professor of Political Science at the University of Chicago 

and his proposal back then was to build Ukraine economically rather than pushing NATO membership.

But the Western plan was regime change in Moscow and the strategy was to bleed Russia economically until the UK or CIA could get a color revolution going.*

It didn't work.

Instead we got the half-a-loaf/permawar approach we were decrying as early as April 2022. Here are a couple posts from those days:

May 25, 2022
Maybe We Should Just Declare War On Russia And Take Their Stuff: Zoltan Pozsar on Russia As A "Global Systemically Important Bank" Of Commodities

None of the electorate in the NATO countries voted for another of these inconclusive, forever wars, so profitable for a select few and so costly in life and treasure for regular people. Surely no one in the developing nations signed on to pay for sanctions with their food budget. It is time to figure out a) What our goals are and b) What the hell we are doing, period and in furtherance of those goals. This isn't some game of RISK with let's try this, or let's try that and no consequences at the end of the night. Since the Maidan coup in 2014 the West has had eight years to plan for this.

Do it or don't do it; because trying to finesse a halfway reaction is nuts.

As the philosopher asked the generals and armaments producers some time ago: 

"When was the last time you b****es won a war?"

August 1, 2022
"No holidays for Ukraine: Financial needs increase"

The EU has to either go all-in or call a halt to what they are currently doing.

This halfway stuff does not work for anyone but the arms merchants and is just plain evil in terms of lives lost and livelihoods ruined. As the BSD's used to say: "Go big or go home."....

December 21, 2023
Industrial Disease: "The U.S. Can Afford a Bigger Military. We Just Can’t Build It"
For at least six months after it became apparent the Western strategy for Ukraine was to dribble enough armaments into the battle to slow the Russian takeover of the eastern third of Ukraine, but not enough for Ukraine to win, we were posting on this weird approach to war....

 

And the inevitable result:

June 5, 2023
Oh My God, What Are The Ukrainian Generals Doing?
They are ordering their men to attack defense-in-depth without air cover and 1/10th the artillery the troops need.... 

*We've mentioned the RAND study a few times including before the Russian invasion of Ukraine. Here's March 25, 2022: 

The U.S. Is Implementing The RAND Corporation Strategy To Cripple Russia

First up, a refresher, from February 8, 2022 (pre-invasion): 

The RAND Corporation Blueprint For Forcing Putin To Over-Extend Himself

I hope that the U.S. or NATO or whoever commissioned this study didn't pay a lot for it, it's basically the strategy that Pope John Paul II, Margaret Thatcher and Ronald Reagan came up with in the early 1980's although the details do differ. The tactical components of the RAND plan are:

 1. Arming Ukraine ;
 2. Increase support for jihadists in Syria;
 3. Promoting regime change in Belarus;
 4. Exploiting tensions in the South Caucasus;
 5. Reducing Russian influence in Central Asia;
 6. Rivaling the Russian presence in Transnistria.

....MUCH MORE

The study is from 2019, its basic idea is to get Russia to overextend itself both militarily and more especially financially. 

On January 12, 2022 Victoria Nuland showed this approach is top-of-mind in the Biden Administration. From Interfax Ukraine:

Nuland: I'm going to let Russians speak for themselves how long they can financially back placement of troops near Ukraine

U.S. Undersecretary of State Victoria Nuland did not make assumptions about how long the Russian Federation can afford to keep a large grouping of forces near Ukraine.

"I am going to let the Russians speak for themselves," she said, answering a question at a State Department briefing about "how long you think Russia can financially back the placement of troops along the Russia-Ukrainian border."

Nuland also said the transfer of a large group of forces to the border with Ukraine was not a cheap operation.

"These kind of deployments, hundred thousand troops out of barracks and on the Ukrainian border are extremely expensive, as is the deployment of this kind of weaponry in the cold winter," she said.

The U.S. goal is not peace in Ukraine.

The U.S. goal is regime change in Moscow, and in furtherance of that objective the U.S. is ready to fight to the last Ukrainian.

Finally from Professor Niall Ferguson (who is developing a consultancy practice. he's a history professor, that has to be a unique challenge)* at Bloomberg Opinion, March 22, 2022.....

"The Marquis de Sade’s Guide to Cancel Culture"

From Bloomberg Opinion, January 31:

The French aristocrat has been both banned and extolled. What does his cultural immortality portend? 

In theology, being condemned to perdition may sound a lot like going to hell, but it’s much worse than spending eternity amid fire and brimstone. Those who believe in the survival of the soul after death shudder at the gravity of perdition: the total dissolution of one’s existence even in spiritual form. In our increasingly soulless secular age, there’s an attempt at a similar punishment: We call it cancellation.

The concept derives from television — that which befalls series and shows with bad ratings, yanked by broadcast networks, never to be seen again. Its first use in popular culture in that sense may have been in the lyrics of Your Love Is Cancelled, by the disco-funk group Chic (“Well I saw it on TV ‘bout someone like me...”). The song’s from 1981, but cancellation as we know it really got going this century. Today, it’s a pile-on of blaming and shaming in our social media public squares that often leads to the target’s commercial or career oblivion. The courts can also get involved to mete out justice. The vitriol makes it much more hellish than old-fashioned consumer boycotts.

Some of the most spectacular examples involve fans turning against their idols. The most recent is graphic novel icon Neil Gaiman, who has received massive condemnation after lurid stories emerged alleging sexual assault and harassment on his part (a particularly explicit account can be found here; read with caution). He has denied the allegations and there are no criminal charges filed against him. Nevertheless, the furor has convinced publishers to avoid or drop Gaiman, who has become a multimillionaire from his oeuvre of close to 50 novels and comic books. HarperCollins and W.W. Norton, which have successfully published his books before, said they have no plans with the British author. In late January, Dark Horse Comics announced it wouldn’t release the last volume of its illustrated version of his 2005 fantasy novel Anansi Boys.
On Friday, Variety reported that Netflix Inc.’s adaptation of The Sandman, based on Gaiman’s bestselling comic books, will end after the second season later this year.

Does such collective vengeance result in permanent perdition? The history of one offender may hold some lessons.

If any literary figure should be up for perpetual cancellation, it’s Donatien Alphonse François de Sade — the Marquis de Sade, pornographer, philosopher, poisoner, prisoner, the prophet of sexual excess and cruelty, the inspiration for the word “sadism.”

It’s not as if no one tried to erase the French nobleman from memory before. Beset by episode after episode of his violent sexual exploits and blasphemous outbursts, his status-conscious mother-in-law had him thrown into prison for more than 12 years, including a dramatic turn in the infamous Bastille just before it was stormed by the mobs of the French Revolution on July 14, 1789. He was condemned to be executed twice — the first time for sodomy and for poisoning prostitutes he’d hired for orgies in Marseille (the women fell ill after ingesting pastilles probably laced with the aphrodisiac Spanish fly). But he and an accomplice fled to Italy and were burned in effigy instead. When he was out of the Bastille, the chaos of the French Revolution saved him in the nick of time from the nick of the guillotine. Ironically, one of the charges was for being a political moderate in the reign of terror of Maximilien Robespierre, whose overthrow the same day, 9 Thermidor (July 27, 1794) likely saved Sade’s life....

....MUCH MORE

Possibly also of interest:

"Sodom, LLC: The Marquis de Sade and the Modern Office Novel"

"Venture Capital Thomas Jefferson on the morality of chance."

From Lapham's Quarterly:

Contributor

Thomas Jefferson

From a petition to the General Assembly of Virginia. So burdened was the third U.S. president by a $100,000 debt that he feared losing his family property at Monticello. Jefferson went to the state legislature for permission to dispose of part of his holdings by lottery, which was otherwise prohibited by law. His petition was twice denied before it passed on February 20, 1826. The lottery never took place, as Jefferson died on July 4 of that year, and his family had to sell off most of his property, including Monticello.

It is a common idea that games of chance are immoral. But what is chance? Nothing happens in this world without a cause. If we know the cause, we do not call it chance; but if we do not know it, we say it was produced by chance. If we see a loaded die turn its lightest side up, we know the cause, and that it is not an effect of chance; but whatever side an unloaded die turns up, not knowing the cause, we say it is the effect of chance.

Yet the morality of a thing cannot depend on our knowledge or ignorance of its cause. Not knowing why a particular side of an unloaded die turns up cannot make the act of throwing it, or of betting on it, immoral. If we consider games of chance immoral, then every pursuit of human industry is immoral; for there is not a single one that is not subject to chance, not one wherein you do not risk a loss for the chance of some gain. 

The navigator, for example, risks his ship in the hope (if she is not lost in the voyage) of gaining an advantageous freight. The merchant risks his cargo to gain a better price for it. A landholder builds a house on the risk of indemnifying himself by a rent. The hunter hazards his time and trouble in the hope of killing game. In all these pursuits, you stake some one thing against another which you hope to win. 

But the greatest of all gamblers is the farmer. He risks the seed he puts into the ground, the rent he pays for the ground itself, the year’s labor on it, and the wear and tear of his cattle and gear to win a crop, which the chances of too much or too little rain, and general uncertainties of weather, insects, waste, etc., often make a total or partial loss. These, then, are games of chance. Yet so far from being immoral, they are indispensable to the existence of man, and everyone has a natural right to choose for his pursuit such one of them as he thinks most likely to furnish him subsistence. Almost all these pursuits of chance produce something useful to society. But there are some which produce nothing, and endanger the well-being of the individuals engaged in them, or of others depending on them. Such are games with cards, dice, billiards, etc. And although the pursuit of them is a matter of natural right, yet society, perceiving the irresistible bent of some of its members to pursue them, and the ruin produced by them to the families depending on these individuals, consider it as a case of insanity, quoad hoc, step in to protect the family and the party himself, as in other cases of insanity, infancy, imbecility, etc., and suppress the pursuit altogether, and the natural right of following it. 

There are some other games of chance, useful on certain occasions, and injurious only when carried beyond their useful bounds. Such are insurances, lotteries, raffles, etc. These they do not suppress, but take their regulation under their own discretion. The insurance of ships on voyages is a vocation of chance, yet useful, and the right to exercise it therefore is left free. So of houses against fire, doubtful debts, the continuance of a particular life, and similar cases. Money is wanting for a useful undertaking, as a school, etc., for which a direct tax would be disapproved. It is raised therefore by a lottery, wherein the tax is laid on the willing only, that is to say, on those who can risk the price of a ticket without sensible injury for the possibility of a higher prize. 

An article of property, insusceptible of division at all, or not without great diminution of its worth, is sometimes of so large value as that no purchaser can be found while the owner owes debts, has no other means of payment, and his creditors no other chance of obtaining it but by its sale at a full and fair price....

....MUCH MORE 

Here, at the age of 83, Jefferson seems a bit more coherent and lucid than some recent examples of the Nation's Chief Executives.

"Shakespeare the economist."

From The Common Reader, February 6:

I am happy to bring you a guest post from the splendid Rohit Krishnan who writes
Strange Loop Canon , all about Shakespeare and economics.

Shakespeare: Beneath the poetry lurks a mind uncannily alert to the costs and benefits of every human transaction. 

Moral money

Shakespeare was a very good amateur economist, for which he gets very little credit. He had to be, to bring his stories to light, to be a true observer of human nature, since human nature is inextricably tied up with the economy. From business dealings in Venice to fights over land in Britain, Shakespeare looks at themes like wealth, poverty, trade, debt, and the moral issues around money.

Even marriages and friendships are intertwined with financial dealings. In The Merchant of Venice, the bond between Antonio and Bassanio is not just friendship but also involves monetary loans. Bassanio seeks to marry Portia not only for love but also for her wealth, to resolve his debts.

He wrote in Elizabethan England, a time rife with changing financial concerns, social hierarchies changing as there’s the rise of the middle class, the rise of mercantilism and trade, and changes in land rights. Shakespeare sets his stories in Venice, Rome, Britain, and beyond, but his abiding preoccupation is the universal pull of money and how it shapes life’s romances and tragedies.

All times seem tumultuous when you look at them closely enough, but with Shakespeare you can see the impacts of the changes being made manifest in the stories he tells.

---

Debt

The Merchant of Venice is famously about Antonio, a Christian merchant, and Shylock, a Jewish moneylender. It centers around the conflict between trade and lending money at interest—a big issue in Shakespeare’s England, where charging interest was often frowned upon....

....MORE

Some of our other folios: 

"William Shakespeare: gangster"

"...an indefatigable Canadian by the name of Leslie Hotson, best remembered today as the man who first stumbled across the records of the inquest into the highly mysterious murder of Shakespeare’s fellow playwright, Christopher Marlowe—uncovered a squalid tale of gangland rivalries in the theatrical underworld of Queen Elizabeth’s day.?

Bard Finance, LLC: Dirty Deeds in the Wool Trade
Shady dealings of William Shakespeare’s father ‘helped to fund son’s plays’

"How Rich Was Shakespeare?"

Whether 'tis Nobler In The Mind To Suffer The Slings and Arrows Of Econ Commentators

William Shakespeare: Annuity Beneficiary 

"In Denmark You Are Now Paid To Take Out A Mortgage"   

"Shakespeare: tax evader and food hoarder?"

And many more.

"Now is the Artificial Intelligence Singularity"

 From Brian Wang's Next Big Future substack, February 23:

In 2015, Waitbutwhy.com had some articles and diagrams explaining how the artificial intelligence revolution of a technological singularity would play out. The diagram above shows how there would be a series of improvement rates that would get steeper and steeper and faster and faster.

My article from yesterday explains how 12-20 years ago we shifted from Moore's law to GPU scaling to AI-LLM scaling and now to XAI scaling speed.

Moore law. -double every 2 years, 1000X compute in 20 years (40-60 year duration)

GPU-AI-LLM scaling - 5X every year in AI compute, 15000 times in 6 years (12 years of duration)

XAI scaling since April 2024 to today and projected through at least 2026 and out to 2030 (11-15X every 6-9 months, 4 million-200 million in 6 years.

 

A debatable AGI will be in 2025. This will be Grok 4, Grok video and Grok voice. Second half of 2025, unsupervised general robotaxi, thousands (~10K) teslabots in factories doing useful work.

Artificial General Intelligence (AGI): Sometimes referred to as Strong AI, or Human-Level AI, Artificial General Intelligence refers to a computer that is as smart as a human across the board—a machine that can perform any intellectual task that a human being can.

Clear AGI and debatable ASI (superintelligence in 2026).

Clear superintelligence in 2027. It will no longer be reasonably debatable that superintelligence has arrived in 2027. In 2028-2029, those still saying superintelligence is not here will be viewed as just in denial....

....MUCH MORE

If his timeline is anywhere close to what actually transpires the next few years are going to be one heck of a ride.